Ever glance at your paycheck and wonder why your take-home pay is so much less than you’d expect from insurance?
The rising cost of employer-sponsored health insurance is a major reason why, a new study argues. The cost of employer-sponsored health benefits increased much faster than workers’ pay since the late 1980s and likely reduced wages by an average of about $9,000 a year by 2019, the study found. As a result, these health benefits have been a major factor in flattening wages and increasing income inequality over the past three decades, researchers reported in the Jan. 16 issue of the journal JAMA Network Open. “These hidden costs of increasing health care are even worse for people of color and low-wage workers, leading to less wage growth, a heavier insurance premium burden and greater income inequality,” Mozaffarian said in a university news release.
For this study, researchers examined national insurance data for people covered by employer-sponsored plans between 1988 and 2019. Annually, nearly 45 million Americans receive health insurance through their employer. In 1988, health care premiums represented about 8% of a worker’s total compensation, results showed. But by 2019, that number had jumped to nearly 18% of total compensation. If the cost of employer-sponsored insurance had remained at the same proportion as in 1988, the average family could have earned $8,774 more in annual wages in 2019, researchers estimated.
Also read-Defense Secretary Austin Leaves Hospital Following Complications From Prostate Cancer Surgery
Black and Hispanic families lost a higher percentage of their wages to health premiums than white families, researchers found. Health insurance premiums represented about 19% of compensation for Asian and black families and nearly 20% of compensation for Hispanic families, compared to about 14% for white families. Low-paid workers were also hit hard. In 2019, health care premiums made up 28% of compensation for some of the lowest-paid families, compared to 4% for the highest-paid families.
Lead researcher Kurt Hager, a population and quantitative health teacher at UMass Chan Medical School, said that this occurrence “can lead to a spiral of financial insecurity as insurance costs go up and wages continue to be suppressed.” Hager finished the project while pursuing a doctorate at Tufts’ Friedman School of Nutrition Science and Policy.
According to Mozaffarian, these results demonstrate the urgent need to alter American health care policy to put a stronger emphasis on prevention and less expensive care. “Health insurance ought to assist individuals, rather than hinder or further distance them from achieving wage parity and income equality,” stated Mozaffairan.
Frequently asked questions
How to pick a health insurance plan
Your total costs for health care: Premium, deductible and out-of-pocket costs When choosing a plan, it’s a good idea to think about your total health care costs (including the premium, deductible, and copayment/coinsurance amounts), the health and drug services you’ll use, the health plan category that works best for you, and plans with easy pricing.
Pick a health plan category that works for you
The Marketplace has 4 health plan categories to help you compare plans: Bronze, Silver, Gold, and Platinum. They’re based on how you and the plan share the costs of the care you get.
Generally, categories with higher premiums (Gold, Platinum) pay more of your total costs of health care. Categories with lower premiums (bronze and silver) pay less of your total costs. (But see the exception about Silver plans below.)
Consider plans with easy pricing
Marketplace plans marked Easy pricing includes some benefits before you reach the deductible. As soon as coverage starts, you’ll pay only a copayment for:
- Doctor and specialist visits, including mental health
- Urgent care
- Physical, speech, and occupational therapy
- Generic and most preferred drugs
And this may help you compare easy pricing plans because they have the same out-of-pocket costs within their health plan category, like:
- Deductibles
- Out-of-pocket maximums
- Copayments/coinsurance
Also read-Immunization Reduces Children’s Risk Of Long-Term COVID
images source: Google
Disclaimer: The opinions and suggestions expressed in this article are solely those of the individual analysts. These are not the opinions of HNN. For more, please consult with your doctor
